Alliance Food to buy NZ-based salmon company

Posted at 07/03/2012 3:52 PM | Updated as of 07/03/2012 3:54 PM

MANILA, Philippines - Alliance Select Foods International (AFSI), the country's leading canned tuna manufacturer, is seeking to acquire Akaroa Salmon NZ Ltd., a New Zealand-based salmon marine farmer and processor of fresh and smoked salmon.

In a disclosure to the stock exchange, AFSI said its board approved its plan to acquire an 80% stake in Akaroa for US$2.184 million. AFSI will invest another $100,000 for Akaroa's working capital needs.

Akaroa is considered a pioneer in New Zealand's farmed salmon industry. It operates 2 marine farms in Akaroa Harbor in South Island and processing facilities in the Riccarton district of Christchurch.

"Alliance's investment into Akroa will enable the Kiwi company to double its farming capacity in the coming years and support its plans to be an export leader into key high-end markets globally," AFSI said.

The purchase of Akaroa will help strengthen AFSI's salmon business, as it gains direct access to raw materials. It will allow AFSI to target new markets by offering Akaroa's fresh products to new markets such as Singapore, Hong Kong, US, South Korea and Japan.

AFSI first entered the salmon business in 2009, and since then it has grown from $4.2 million in revenues in 2009 to an expected $23 million in revenues this year.

"With continued investments in this segment, Alliance is on its way to achieve its goal of becoming a significant player in the global salmon industry," the company said.

Also, AFSI management was given the authority to negotiate and sign a share purchase agreement with Akaroa. The deal is expected to be completed by August 2012.

To fund the acquisition of Akaroa, AFSI will conduct a private placement offering of its authorized but unissued capital stock. The company will issue 60,668,750 additional shares, which constitute 5.67% of its expanded capital.  The shares will be offered at a price of P1.60 per share,

The offering is expected to close before the signing of a share purchase agreement with Akaroa in August 2012.

Alliance, formerly known as Alliance Tuna International, Inc., began commercial operations in General Santos City in 2004. The company is engaged in tuna processing and canning, and the export of canned tuna products to Europe and North America.